JPMorgan would never have been hired to manage Max Hopper’s estate, if Jo had her way. She would have done it herself. All four wills that Max drafted before his death, but never signed, said Jo should serve that role. She’d handled the family finances for decades, and, like her husband, she’d worked as an executive at American Airlines, once managing a staff of five systems analysts, a personal assistant, and a multimillion-dollar budget. Plus, the law, Jo figured, was easy to understand. When someone dies “intestate,” as a lack of a will is called, Texas law stipulates that the decedent’s share of the community property—anything Max and Jo owned jointly—will go half to the surviving spouse and half to the decedent’s children. Any property owned outside of the marriage should go two-thirds to the children and one-third to the surviving spouse. “So all we had to do,” Jo says, “was go through the assets, divide everything by two and then divide again by two. Then we’re out of here.”
The children allege that there were other imbalances that also put them off. For one, the bank flew Jo to New York and sent her, gratis, to The Phantom of the Opera, trying to woo her to open a wealth management account. She did, and as assets were divided and released to Jo, her share was transferred to a JPMorgan investment account. Over time, that money accumulated to more than $4 million. The children were never told about the New York trip. They also alleged that they weren’t told that Jo wasn’t asked to pay any of the $230,000 fee JPMorgan charged to administer the estate. In January 2011, Jo says that Mike Graham, her probate attorney at the time, sent an offer to Novak saying Jo wanted to buy all of the personal property that had not yet been distributed by the bank. That included Max’s collection of 6,700 putters, 900 bottles of wine, the furnishings in her Preston Forest home, jewelry, and more. Basically, everything except the house. Novak replied to Graham but never notified the children of the offer, Jo says. Two more emails from Graham followed. No counteroffers came back. “We assumed the children had rejected the offer,” Jo says. This pattern continued. Family members mistrusted each other. Family members contacted the bank with various allegations. The bank didn’t share those allegations with both sides. Mistrust festered.
Max Hopper was a titan of early corporate information technology, a genius who led the development of American Airlines’ AAdvantage program and its SABRE reservation system.
By the summer of 2011, Jo’s attorneys had become so concerned with the bank’s lack of communication that they advised her to close her wealth management account. The $4 million she had invested with JPMorgan promised to eventually bring a nice return to the bank. Financial institutions typically charge a fee of just under 1 percent of the total assets in accounts worth more than $1 million. Meaning that JPMorgan, in less than five years, could have made more off of Jo’s wealth management account than it would make administrating Max’s estate. (The bank says it never collected more than $5,000 in fees from Jo’s account in that first year.) As soon as the account was closed, Jo says, the bank turned against her. “The relationship became adversarial,” she says. “Suddenly, if the children objected to something I wanted, the bank sided with the children.” That’s what seemed to happen when a dispute arose over Jo’s Preston Forest house. The same summer that Jo closed her wealth management account, she asked the bank to divide the ownership of the house evenly between her and the children. Jo had already exercised her homestead rights on the property, meaning that as long as she could make the payments on the house, she would have the exclusive right to live there. Now she wanted the home divided into equal ownership. The children, though, wanted cash for their half—Max’s half—of the home. The way the children, and their then attorney, Gary Stolbach, figured things, dividing ownership in a home they could not use and could not sell so long as Jo lived there (which was her guarantee under the homestead rules) was not a fair division of the estate. The children wanted the property “partitioned,” meaning they would get compensated for their half of the home and Jo would then own it outright. There’s a lot more brain-rattling legal nuance involved from there, but the important thing to know is that this “partition” was a novel legal theory Stolbach had floated. Jo says such a thing had never been done before to a widow or widower in Texas, and the bank had no obligation to go along with it. JPMorgan, in fact, had the right to simply declare the home equally divided, which is what Jo wanted and what the bank also initially said it wanted. “The bank was appointed as the independent administrator,” says James Bell of James S. Bell PC in Dallas, who represented the children during the jury trial but is no longer an attorney on the case. “In an independent administration, it means the bank can do whatever, whenever, however it wants to do. It can split the assets how it wants as long as it is not violating the statutory guidelines. And for over a year the bank could have divided that house how they saw fit in accordance with the law. But they just didn’t do it until there was litigation.” The litigation was initiated by Jo. She filed a lawsuit against both the children and the bank in late September 2011. From the children, she sought a court declaration that a partition was not legal. From the bank, she sought a declaration that the bank had breached its contract with her, that it had committed fraud and breach of fiduciary duty by misrepresenting its expertise in handling cases like hers and by failing to properly communicate with her and the children. Further, she sought the bank’s removal as independent administrator.
Jo picks up the bulky book with one hand and flips it open to a page she has marked. It shows the probate code’s stance against partitioning a home after the death of a spouse. “It’s right here. It’s the law,” she says. “The bank knew that. But the bank was bullying me, trying to emotionally break me. This tactic was unbelievable and unprecedented as far as I could find. They were going to sell a widow’s home.” Initially, the bank’s stance was upheld, in part, by the probate court. But eventually, the probate court modified its ruling, and the litigation over the house concluded in two ways. In June 2012, the bank decided to divide the house ownership in equal interests, as Jo had wanted all along. Then, on December 3, 2014, the three justices who preside over the Eighth District Court of Appeals issued a 26-page ruling that chided the earlier probate court and declared the novel partition theory unlawful. Jo had her house; the children had half a mortgage.
“One juror told me, ‘If the bank didn’t care about Jo Hopper and the money she had, why would they care about us when we don’t have that kind of money?’ ”
JPMorgan is not wrong about the family’s blood feud. The bank says it tried to get the sides to come to terms before the issues about the house ended up in court. “We continually urged the family to reach an agreement on the division of the home and personal property,” says Greg Hassell, a spokesman for JPMorgan. The children declined to comment on specific questions regarding their stepmother. But attorneys who have represented both Jo and the children say neither side is speaking to the other, except through their lawyers. That might have something to do with a handful of nasty court filings that came out after Jo sued JPMorgan and the children in September 2011. In one such filing, from 2016, the children said that they “have been antagonistic to Mrs. Hopper (personally, legally, or in both contexts) for nearly six years. Beginning with Max Hopper’s sudden death in 2010, distrust marred the relationship between the Heirs and Mrs. Hopper. This uneasy relationship is precisely what prompted the Heirs to insist Max Hopper’s estate be administered by a neutral, independent third party. That is what the Heirs believed the Bank to be when they engaged its services as independent administrator in 2010.” In another filing, from 2014, Jo’s attorneys compiled a long list of things that they wanted to be sure would never be mentioned in front of jurors. Those included: Jo’s “decision to pay for or not pay for any college related expenses, including tuition, for any grandchild of Max Hopper”; why Jo “did not sit on the front row of Laura Wassmer’s wedding in 1987”; that, when a “document production” on Jo’s behalf in this case was held in a garage in 2012 “it was cold outside, and/or the house was locked so if anyone needed to use the restroom, they had to go down the street to a public restroom”; “Any suggestion that Jo Hopper had any type of romantic relationship with Max Hopper prior to his divorce”; and any “reference to a book entitled How to Marry a Millionaire.” Jo insists the bank exacerbated that infighting. “I’ll admit,” she says, “there was a crack in our relationship. Anybody who goes through the loss of a father with a stepmother, you’re going to have a crack. But what JPMorgan did was they took that crack and they made it into the Grand Canyon.” But since JPMorgan officials have said in court that the family dynamic was toxic and unsalvageable, and since both Jo and the children sued to have the bank removed as independent administrator, one wonders why the bank didn’t just resign. The answer to that question, say attorneys for the children, ends with two words: “theft” and “felony.” “That is the key question you have to ask yourself here,” says Bell, the attorney who represented the children during the jury trial. “Why did the bank not step down as the independent administrator? The reason is if they stepped down, there was a lawsuit naming them, so they would have had to pay the legal fees for that lawsuit out of their own pocket. But if they stayed in the case, they had a war chest to defend themselves with. And the war chest they had just so happened to be an account with my clients’ money in it.” Independent administrators are allowed to hire attorneys and pay legal fees using assets of an estate so long as they are using those lawyers and fees to represent the interests of the estate. And when Jo sued the bank and the children in 2011, the bank decided to cover the legal costs of defending itself by withdrawing money from an estate account that had nearly $4 million in it. The children claim that money belonged entirely to them. When the children in turn sued the bank, the bank used that same war chest—the money that would have gone to the children—to fight their claims. Once the children discovered the estate’s money was being used to pay the bank’s lawyers in the legal fight, they asked for the bank to stop using the account. JPMorgan did not comply. Eventually, the account was drained of all but $100, just enough to keep the account open. Then JPMorgan made its own novel legal move. The estate, as administered by the bank, took out a loan, from JPMorgan, for more than $900,000. The bank, in other words, loaned itself money, indebting the estate in the process. That was only revealed during the trial when Bell cross-examined the lead attorney for Hunton & Williams, which JPMorgan had retained. Just before closing arguments in the jury trial, JPMorgan decided to forgive the estate that loan amount and pay the $900,000-plus out of its own pocket. But it did not reimburse the estate for the nearly $4 million it had already spent on legal fees. The six jurors found that JPMorgan had committed something called “conversion” when it took money out of the estate’s account to pay attorney’s fees against the will of the children. “Conversion” is a term of art that means taking something that doesn’t belong to you and exercising control over it even when the rightful owner demands that the something be returned to their control. “Fiduciaries are entitled to hire counsel,” says Russell Fishkind, a partner with Saul Ewing Arnstein & Lehr in New York and the author of Probate Wars of the Rich & Famous: An Insider’s Guide to Estate Planning and Probate Litigation. “So long as the fiduciary’s goal is to further the interest of the estate and enhance the purpose of the estate, and their fees are reasonable, courts will typically allow the fiduciary to hire counsel and for the counsel fees to come out of the estate. “The question in this case was, ‘Is that what JPMorgan was doing?’ Clearly the jury thought not. It thought the company was working in its own interests, not in the interests of the estate.” The children’s attorneys, in an October filing with the probate court, also now say that the conversion they’ve alleged in this case qualifies as theft under the Texas Penal Code. They contend that the theft is a first-degree felony because the value of the property stolen is more than $300,000. If the court agrees with the children’s attorneys, then the state’s caps on punitive damages—Texas generally limits such damages to two times the amount of actual economic damages—may no longer apply. JPMorgan could face a significant payout to the children and maybe to Jo as well. Tom Fee, a partner with Dallas-based Fee, Smith, Sharp & Vitullo, told me by phone in early October, “We think we can bust the punitive damage caps in Texas. There is a provision that says if you’re a financial institution and you basically commit a crime, the caps don’t apply.” Still, Fee and his partner Lenny Vitullo, who was on the trial team for the children, haven’t asked the court to uphold the jury’s huge award—whatever that award might be. Initially, the firm said Jo had been granted $2 billion and their clients had been granted $4 billion by the jury. It even issued press releases to that effect. But, looking more closely at the jurors’ paperwork, it became clear that the jurors had gone further. The six-person panel found that JPMorgan had made malicious breaches in its fiduciary duty to the estate—meaning Stephen and Laura collectively. It awarded the estate $2 billion for that. The jury also found that JPMorgan had committed fraud, for which it gave $1 billion each to Stephen and to Laura. It also awarded the same $1 billion amount to each of the children for negligence on the part of JPMorgan. That’s $6 billion total for the children and $2 billion for Jo. The bank has suggested the jury award is out of line and will not stand up to judicial review. But, even though Fee believes the award is something more than jackpot justice from a runaway jury, they won’t ask the probate judge reviewing the jury award to uphold the unprecedented award. Instead, they’ve asked for about $75 million, or nine times the actual economic damages they say the children have suffered. “We realize we’re not going to collect the $2 billion,” Fee told me just two weeks before Stephen and Laura asked their attorneys to stop speaking with the media. “So we’re seeking the maximum that the law does allow us to recover. For our clients, this is about more than money. Our clients really wish Chase would take some responsibility here. So we want to back up the jury, back up those citizens who gave their time and attention to this. And to protect other consumers, we believe we need to make this stick.”
The jury verdict in the hopper case came after midnight on September 27. The jurors had deliberated for four hours. As soon as they were done, they sought out Jo, Stephen, Laura, and their attorneys. “They said they felt bad about what Jo had been through,” says Loewinsohn, Jo’s attorney. “One of them told me, ‘If the bank didn’t care about Jo Hopper and the money she had, why would they care about us when we don’t have that kind of money?’ ” The jurors said the same thing to Stephen and Laura, who agreed to answer a few of my questions jointly, by email. “In talking with several of the jury members after the trial, they commented that they felt we had been bullied by JPMorgan, and that they awarded the huge verdict because they didn’t want other families to go through what we have had to go through,” the children wrote. “They were hoping that the verdict would change the way JPMorgan conducted business.” Funny thing about that: on the trading day immediately following the early morning jury verdict, JPMorgan Chase stock opened at $93.70 per share and closed up, at $95.18. Either Wall Street figured a company with 243,000 employees and a net income of $24.7 billion could survive an $8 billion payout, or the verdict hadn’t registered at all with investors. Still, the verdict did generate some bad publicity for the bank. On The Motley Fool Podcast, for instance, co-hosts Alison Southwick and Robert Brokamp bantered about it. “Anyone who reads about this case will be told it’s going to get knocked down in appeals,” Brokamp said. “They’re not going to get $4 billion to $8 billion. The lesson, here, is to get an estate plan. But if you don’t have one, hire JPMorgan. They’ll do a horrible job—” “And,” Southwick said, “You get your payday.” That remains to be seen. The probate court will have more hearings on the case early this month, but a final ruling on the historic jury award is likely months, if not years, away. The stepmother that neither Stephen and Laura are speaking to, the stepmother who is no longer in touch with her grandchildren because of this case, she will have to wait. “We fought,” Jo Hopper says. “But we haven’t effected change. Not yet.”